LoRa Tariffs 10X Cheaper than LTE-Based Prices?

SK Telecom price plans for LoRaWAN-based Internet of Things services sheds at least some light on retail pricing for all such services, including rival services based on use of mobile networks. Specifically, LoRa services are an order of magnitude lower than comparable LTE network connections, according to a report by the Korea Times.

That pricing differential suggests why many tier-one mobile service providers will try to create additional roles within various IoT ecosystems, instead of supplying access services.

The “Band IoT” plans come in six different tiers based on the amount of usage, from Band IoT 35 (approx. US$0.3) priced at KRW 350 to Band IoT 200 priced at KRW 2,000 (US$1.75).

Sigfox makes the same observation about LTE-based IoT access being 10 times more costly than Sigfox.

Will RCS "Save" Mobile Messaging or Boost Google Back into Messaging Platform Contention?

It remains to be seen whether Google’s support of Rich Communications Services (RCS), using Jibe, can create a big new role for Google in the messaging platform space. Also unclear is how well RCS will protect mobile operator revenues in messaging.

RCS currently represents 32 percent of the total carrier messaging revenue globally, according to ABI Research, increasing to 72 percent by 2021.

RCS global revenue is projected to grow from $23.6 billion in 2015 to $40.1 billion in 2021, not enough to halt a decline in service provider global messaging revenue, which will decline about four percent between 2016 and 2021, ABI Research projects.

To the extent that RCS succeeds, it will likely be driven by Android users, as iPhones do not support the standard natively, while  most smartphones globally use Android. And “success” might be a matter of preventing further decline, not mobile operator revenue growth.

source: Analysys Mason

Middle East Africa Public Cloud Market Will Grow 18% in 2016

The public cloud services market in Middle East and North Africa (MENA) region is projected to grow 18.3 percent in 2016 to total $879.3 million, up from $743.1 million in 2015, according to Gartner analysts

Business process as a service (BPaaS), the largest segment of the cloud services market in MENA, is expected to reach $261.3 million in 2016, a six percent increase from 2015.

The cloud management and security services market is the fastest growth segment, with 2016 revenue to grow 27.5 percent from 2015.

Software as a service (SaaS) is expected to grow 26.6 percent in 2016 to reach a revenue total of $210 million.

MENA Public Cloud Services Forecast (Millions of U.S. Dollars)
	2015	2016	2017	2018	2019	2020
Cloud Business Process Services (BPaaS)	246.6	261.3	280.1	300.7	323.0	340.2
Cloud Application Services (SaaS)	166.1	210.4	265.6	332.7	411.7	509.8
Cloud Application Infrastructure Services (PaaS)	61.8	77.8	99.9	121.3	142.0	162.8
Cloud System Infrastructure Services (IaaS)	81.1	96.5	115.2	138.1	164.7	197.3
Cloud Management and Security Services	70.8	90.2	113.2	138.8	167.4	195.6
Cloud Advertising	116.6	143.1	193.0	226.4	267.7	319.4
Total	743.1	879.3	1,067.0	1,258.1	1,476.6	1,725.1

source: Gartner

Smart Cities: Not Such a Smart Early Years Investment?

Smart management of traffic and smart parking initiatives will save 4.2 billion man-hours annually by 2021, a new study by Juniper Research predicts. The issue is how such improvements can be effectively monetized, creating tangible revenue streams that supply the incentives for investment and sustainable operations long term.

Smart city revenues are expected increase by almost 14 percent in the coming years, growing to $2 trillion by 2020, research by Arthur D. Little suggests. Of course, as a practical matter, such global forecasts, amalgamating revenue from many different sources, are less relevant for actual firms operating in local markets.

“Today, the majority of smart city investments are flowing into smart grids, reduction of carbon emissions, public broadband (e.g. free Wi-Fi) and building automation,” says Ansgar Schlautmann, Arthur D. Little global head.

Some two million smart parking spaces will be installed globally by 2021, Juniper predicts, providing some of the quantifiable revenue upside.

Additionally, the research found that the smart street lighting market, consisting of micro-controlled LED units and sensors is expected to surge over the next five years, with over half of installed LED fixtures being networked globally by 2021.

Some reduction of municipal utility bills will provide some of the benefits. Additional sensors installed on fixtures enable new services for revenue generation, such as municipal Wi-Fi. In the early years, it hard to see how such apps can sustain the expected investment.

How Long Before IoT Reaches 10% Adoption in Most Markets?

Experience (some might say “history”) is a highly-underrated analytical tool, even if most of us have only a few decades of experience in any single industry or industry segment to draw upon.

Experience would eventually impress upon you that few important new technologies ever develop as fast as observers predict. But for truly important technologies, that lagging adoption in the early days is later matched by adoption that exceeds forecasts. In other words, adoption tends to be non-linear.

All that can be lost when time frames are too compressed: then every innovation seems to have a linear and “rapid adoption” curve. But “decades” to a “couple of decades” and sometimes even “a few decades” is the right timeframe for significant adoption of some ideas and technologies.

Some might predict that the “Internet of Things,” even in the most-advanced industrial segments or vertical application classes, might well take two decades to reach significant adoption, assuming the turn of the century is when the phrase “Internet of Things” happened.

Even that might be too optimistic, as some of us will recall talk of connected vending machines in the 1980s. By that measure we are in the fourth decades of conceptual thinking about what we would now call an IoT application for vending machines.

source: Franz Gilbert

The more complex the ecosystem, the longer it takes. Device adoption tends to happen faster: it is a “simple” matter of large numbers of people buying a tool. When attitudes need to change, and trust established, a decade can pass before 10 percent of people will adopt an important new technology. Use of debit cards and automated teller machines had that character, for example.

Kevin Ashton, many suggest, coined  the phrase Internet of Things in 1999.

The basic concept remains the same: ‘If we had computers that knew everything there was to know about things, using data they gathered without any help from us, we would be able to track and count everything, greatly reducing waste, loss and cost,” he said. “We would know when things needed replacing, repairing or recalling, and whether they were fresh or past their best.”

“In the twentieth century, computers were brains without senses: they only knew what we told them,” Ashton said. “In the twenty-first century, because of the Internet of Things, computers can sense things for themselves.”

The point, should it bear repeating, is that major and successful innovations often take quite a long time to move from conception to mass adoption. As much attention as now gets paid to IoT, we are 16 years out from inception.

Many predict quite substantial diffusion by 2025. That would mean a quarter century from “idea” to “widespread commercial adoption.”

That is not unusual, even if we often point to the rapid adoption of new and fundamental technologies ranging from use of personal computers to use of the Internet.

Consider the automated teller machine, one example of a useful and now ubiquitous technology routinely used by consumers.

ATM card adoption provides one example, where "decades" is a reasonable way of describing adoption of some new technologies, even those that arguably are quite useful.

Debit cards provide another example. It can take two decades for adoption to reach half of U.S. households, for example.  

IoT represents a very-complicated ecosystem, with the sustainable business model being among the developments required to propel further development. Yes, hardware and software development is required. But the speed of that development is propelled by creation of viable business models to support actors making big capital investments to satisfy demand.

Many point out that traffic and parking are the sorts of problems IoT can help solve. All true. The issue is whether--and how fast--business models can develop to fully fund the deployment of the extensive networks and devices (including automobiles) able to take advantage of IoT-enabled transportation and vehicle parking.

source: ICS

All of that likely means that IoT adoption by even 10 percent of actors in an application universe will take longer than most believe. Experience is the teacher, in that regard.

Why IoT Matters for Consumer Internet Access

The connection between the industrial Internet of Things and widespread consumer Internet access is not always crystal clear.

But there is a direct connection: all ubiquitous networks eventually wind up being supported by a range of revenue sources from both consumer and business customer segments.

Historically, low consumer communications prices were possible only because high-profit business services were used to subsidize the consumer services which sometimes lost money and sometimes only were profit neutral.

That is less true than in the monopoly era, but Verizon, in 2014, still generated more than half its total fixed network revenues from business customers (wholesale, enterprise, small business).

source: Verizon

Something like that is likely to develop with industrial Internet of Things or enterprise IoT services as well: they will generate both revenue and profit margin to feed the one network used by all customers, business or consumer.

In a sort of similar way, each new Internet facilities domain tends to improve the value of the whole interconnected set of networks. Such network effects mean the value of the whole network grows with the volume of end points or connections.

The point is that IoT revenues matter because they can provide enough gross revenue and profit margin to help fund upgrades and operation of the whole network. And anything the improves the sustainability of the network as a whole makes possible services for consumers, especially the more cost-conscious consumers who might use the network.

Cable TV providers likely still earn most of their revenue from consumer segments. But for telcos, business customers arguably drive more business revenue, and telcos earn higher margins on business customer accounts.

That is likely to be the case for IoT as well.

source: Deloitte University Press

Zero Rating is Good for Consumers, Google, Media and Communications Companies.

Some now say Google is essentially dictating Internet policy in the United States and European Community. One does not have to make such claims to note that it is very hard (virtually impossible) to find any Internet-related issue, on either continent, where Google’s position has lost a regulatory battle.

That is not to belittle in any way Google’s advocacy of its own business interests. But the simple matter is that no firm spends serious money on regulatory matters without a clear understanding of its own economic interests.

And one is hard pressed to find any significant issue where Google has not gotten its way. That is not nefarious. But some of us would argue that Google’s very success shows why it could be quite unwise to impose more regulation on the industries Google is beating in the policy battles, namely Internet service providers of several types.

The very large point is that it does not make sense to place new burdens or restrictions on industries that are in decline.

On the other hand, it likewise makes sense to encourage the growth of new industries by likewise minimizing barriers to their growth. A regulatory “light touch,” in that sense, makes sense both for the industries policymakers might wish to encourage, as well as industries with large societal and economic impact that are virtually destined to be smaller in the future.

The issue of bans on zero rating provides an example. Ironically, Google is able to provide valuable services of so many types, at zero incremental cost to end users, precisely because third parties (advertisers) subsidize the services and apps on behalf of consumers.

In other words, Google literally has built its business on zero rating, but wants ISPs banned from any similar practices, even if zero rating has been commonplace in the Internet, media, content and communications businesses for decades.

“Zero rating is nothing more than price flexibility,” argues consultant John Strand. “ It is a business model enjoyed across every industry and even in the Internet itself.”

“Every Google search is zero rated by an advertisement,” Strand notes. “That is a third party subsidizes the cost so the end user does not have to pay.”

That is no argument for placing limitations on Google’s ability to innovate, in business models as well as other key elements of its growing stable of businesses. Google should be as free as possible to innovate.

But ISPs also need more ability to innovate, as their core revenue models are disappearing. Zero rating is what toll free calling has been about. Zero rating is what advertising-supported content and media have been all about. Fairness, as well as necessity, requires that the present lawfulness of zero rating be maintained, many would argue.